Question

Manuel has a remaining balance of $563 on his credit card. His credit card company has an APR of 15 percent. How much will Manuel pay in interest for one month?

$7.04
$84.50
$15
$1.25

Answer 1

100 : 563 = 15 : X
100x = 8445
x = 84.45
Manuel will pay $84.45 in interest for one month

Answer 2

The correct option is A. $7.04

Explanation:

Remaining balance of Manuel on his credit card = $563

APR that is charged by company = 15%

Now, Interest paid by Manuel in 1 year = 15% of Remaining Balance

⇒ Interest paid in 1 year = 0.15 × 563

⇒ Interest paid in 1 year = $84.50

Now, 1 year = 12 months

So, Interest paid in 12 months = $84.50

`\bf\textbf{Hence, Interest paid in 1 month = }(84.5)/(12)=\$7.04`

The correct option is A. $7.04